Brian Charrington achieved notoriety in the 1990s after it emerged he was working as a police informer while running a huge drug importation business with the tacit consent of corrupt detectives. Photograph: NNP/North News & Pictures, Newcastle

One of the most audacious and brazen drug smugglers ever to come out of Britain has been arrested in Spain on suspicion of murdering a rival and of running a multimillion pound drug trafficking organisation.

Brian Charrington, 56, a former second-hand car dealer from Middlesbrough, achieved notoriety in the 1990s after it emerged he was working as a police informer while running a huge drug importation business with the tacit consent of corrupt detectives.

Being a supergrass has done little for his standing in the underworld: "That dirty rat" is how one of his former criminal associates described him to the Guardian this week, while Spanish police categorised him as "one of the top 10 most investigated criminals in Europe".

As a spokesman for the Serious Organised Crime Agency (Soca) put it: "To say we are pleased he is in custody is an understatement."

After being acquitted in four high profile trials in the UK and abroad, Charrington may well have considered himself untouchable. Six years ago he walked free from a court in Madrid after a panel of Spain's most senior judges found him not guilty of a 1997 plot to import £10m-worth of cannabis via a 279-tonne yacht called Simon de Danser.

Stories of his outrageous largesse entered folklore. One former associate claimed in 1999 that Charrington kept crocodiles in the swimming pool of his Spanish villa. "It was like the baddie Blofeld in the James Bond films," he told the News of the World.

Three years ago Charrington's three sons appeared in a YouTube video entitled Drug Dealers' Birds. Subtitled Footballers' Wives It Aint, this seven-minute film showed the violent sex- and cocaine-filled lives of British gangsters exiled in sumptuous Spanish villas.

The film's director, Sean Cronin, confirmed on Friday that he had cast the Charrington brothers in his "completely fictional" film but said he had not known about the family's past at the time.

Danny Charrington appeared as a drug dealer called Cava who unwisely slept with the drug baron's wife, Chablis; Brian Charrington Jr appeared as a skinheaded hardman called Papa Bear;and Ray Charrington had a bit part as a goodtime boy sipping champagne on a yacht.

But it was at their local yachting club in Calpe, Alicante, on the Costa Blanca that Ray and his father were this week arrested by nine armed Spanish police.

Charrington Sr has been charged with drug trafficking and membership of a criminal organisation after police found more than 200kg of cocaine hidden in one of 10 luxury properties he owns in the region. Assets totalling more than €5m (£4.3m) have been seized, including a fleet of expensive cars and two boats. Officers discovered £145,710 stuffed into a bin bag, a further £41,100 in a rucksack and €140,000 stashed in a safe.

No crocodiles were present in any of his pools, according to Víctor Fernández, a spokesman for the Spanish police.

He said Charrington appeared to live in two of his properties, which were heavily fortified with large fences, CCTV and guard dogs.

Another of his houses was until recently occupied by Andrew Moran, a 31-year-old from Salford who vaulted from the dock and escaped during his trial for armed robbery of a Royal Mail van four years ago.

Moran was arrested in May and detectives are now investigating whether weapons seized at his villa belonged to Charrington.

According to Fernández, Spanish police also suspect Charrington of the murder of a former business associate, Alain Coelier. He was killed in 2010 the night Spain won the World Cup, along with his bodyguard. Coelier was one of a number of men arrested aboard the cannabis-laden Simon de Danser yacht in 1997.

Charrington's French girlfriend, a woman named by Spanish police only as Isabelle R, was also arrested in Venezuela this week, suspected of being part of a conspiracy to ship large amounts of cocaine by boat. She was formerly in a relationship with Coelier, Spanish police said.

Another of Charrington's sons, Brian Jr, served a number of years in a German jail at the start of the millennium after being found guilty of a plot to "fraudulently evade the prohibition on the importation of cocaine".

Charrington received a seven-year sentence for the same plot, but according to Spanish police was back living in Alicante in 2006.

The Charrington family had originally fled to Spain in 1993 after the collapse of a trial he faced at Newcastle crown court alongside fellow international drug dealer Curtis Warren – best known as the only drug dealer to ever make it on to the Sunday Times Rich List.

The pair and their associates were accused of importing £150m worth of Colombian cocaine to the UK hidden in lead ingots.

During the trial it emerged Charrington had been working as an informant for the north-east crime squad, who allowed him to carry on his global drug dealing and money laundering business in return for information on other criminals.

Several months after the trial collapsed, ostensibly because of lack of admissible evidence, one of Charrington's police handlers, Harry Knaggs, was allegedly seen by customs officials driving a £70,000 BMW registered to one Brian Charrington.

Years later during an Assets Recovery Agency hearing, Charrington said in court that £2m found in his loft following his arrest for the ingot plot was honest money he earned trading in diamonds.

A judge eventually ruled the cash probably belonged to one of his associates, but from the lavish appearance of his Alicante empire, Charrington certainly has not gone short.

• This article was amended on 22 July 2013 to correct the full name of the Serious Organised Crime Agency.